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In a Rare Collaboration, Researchers Will Study Student-Loan Counseling at DeVry U.

Many academics say they have a hard time conducting unfettered research on students at for-profit colleges. And just about everyone says that all students, but particularly those who are first-generation college students from from lower-income families, need better counseling about the loans they are assuming to go to college.

Now two professors at the University of Wisconsin at Madison will attempt to bridge both challenges with a new six-year study set to begin this September at DeVry University.

The researchers, Sara Goldrick-Rab, an associate professor of educational-policy studies and sociology, and J. Michael Collins, an assistant professor of consumer science, will be studying the borrowing practices of 10,000 online students at DeVry.

All of the students in the study will receive loan counseling through a special online portal offering basic, intermediate, or intensive levels of loan counseling that the researchers will design. Students will be assigned randomly to one of the levels. Then, with the cooperation of DeVry, the researchers will track the students’ borrowing patterns and academic progress.

Ms. Goldrick-Rab, who is an occasional contributor to The Chronicle, studies the effects of financial aid on student behavior. Mr. Collins specializes in the borrowing habits of lower-income people.

“We were struck by the lack of randomized trials in loan counseling,” Ms. Goldrick-Rab said.

DeVry offers an ideal test bed, she added, because “they have large numbers and they’re all online.” That means, if a student drops out, the researchers know the exact day he or she stopped logging in. And more to the point, Ms. Goldrick-Rab said, “the group that we’re always concerned about is exactly those students.”

“The research question is, Does information affect loan-taking at all?” she said.

During the meeting, DeVry’s vice president for regulatory affairs, Tom Babel, was talking with Deborah Cochrane, from the Institute for College Access and Success.

Although the institute, which is known as Ticas, has been a vocal critic of many for-profit colleges and their practices, DeVry has sought advice from the organization in the past for its net-price calculator, and Mr. Babel said in a recent interview that he was interested in some of the suggestions Ticas has been making to the federal government about improving loan counseling.

“Students over-borrow if they don’t understand what the impact is,” Mr. Babel said. About 90 percent of DeVry students borrow, and many of them are “unbanked,” he said, using a term that describes adults who don’t have bank accounts and who may be unsophisticated about financial-industry practices.

As a party to that borrowing, Mr. Babel said, “we have some responsibility to ensure that students understand what that arrangement means.”

That responsibility is legal as well as moral. Colleges with default rates above certain thresholds over several years lose eligibility to participate in the federal student-aid programs. DeVry’s default rates are below those thresholds, but for both the two-year calculation and the new three-year one, its rates exceed the averages for all for-profit colleges, according to its own annual academic report. (Its two-year default rate is 13.3 percent; its three-year rate is 24.1 percent.)

Knowing of Mr. Babel’s interest, and Ms. Goldrick-Rab’s expertise, Ms. Cochrane introduced them during the conference.

Ms. Goldrick-Rab said that neither she nor Mr. Collins would get a penny from DeVry, or from Everfi, the company that is adapting its Buttonwood loan-counseling platform for DeVry and the researchers to use in the study. Ms. Goldrick-Rab and Mr. Collins are still seeking $50,000 to $100,000 to finance the work.

The control group in the study will get the level of counseling required by federal law. Others will get more, but Ms. Goldrick-Rab said she didn’t plan to make the other levels too elaborate: “I don’t want to spend a lot of time finding a solution that we can’t scale.”

Mr. Babel, too, is hoping the study will point to effective practices. The study may show, for example, that students who have failed a course, and then borrow money to retake it, are at greater risk of eventually defaulting on their loans. If so, he said, that might argue for policies that would prompt the government, which is now the source of all nonprivate student loans, to pay more attention when awarding a second loan. Perhaps certain events should trigger different levels of counseling by law, he said.

Although the study will run for six years, Ms. Goldrick-Rab said she hoped to have results that could be put to use within a year.